Teen iPhone share seen doubling as iPod, iTunes flatten

In the latest round of its semi-annual teen surveys, analyst group Piper Jaffray finds that ownership of Apple's iPhone has doubled in six months and is set to double again, though cooling iPod and iTunes use suggests a changing of the guard.

Of the nearly four hundred teenagers questioned by Piper for its spring study, about 6 percent of these already owned an iPhone despite the handset being on the market for less than a full year. The figure represents exactly twice the percentage of the youths that owned the Apple technology in the fall.

Crucially, the remaining percentage that plans to buy an iPhone hasn't changed. As with the fall poll, 9 percent of all the teen respondents expect to buy the device sometime within the next six months.

To senior analyst Gene Munster, this potentially signals a trend that doubles Apple's user share once again, with as much as 12 percent of the same group owning the touchscreen phone by the time of the next survey, in fall 2008. The increase would give Apple more than its desired 10 percent share of the cellphone business, albeit only among younger buyers.

Ownership of its longstanding iPod line is also at a record high since the surveys began tracking the information, Piper Jaffray notes. From those that own an MP3 player, about 86 percent have at least one form of iPod, up from 82 percent half a year before. Overall use of MP3 players is also at a record 87 percent, climbing significantly from 80 percent in the last survey.

iTunes use is also up slightly, with 81 percent of legitimate music downloaders using the Apple-run store versus 79 percent in the last survey. The balance has shifted more towards legal purchases, with 39 percent of the teens choosing to buy downloads rather than simply bootleg them through peer-to-peer networks.

The report suggests to the analysts that Apple has little to fear for its control of the US music business in the short term, especially among its younger customers.

"Apple's dominance in the portable media and online music markets is going seemingly unchecked," Munster observes.

Clouds loom over the news, however, and point to the iPhone potentially dulling the iPod's earlier success. While Apple's command of MP3 players has increased, actual demand for any MP3 player has dropped to its lowest amount in three years -- just 28 percent look to buy a new player in the next six months, while 47 percent did in fall 2007.

Moreover, while Apple's share of online music purchases is higher than in late 2007, it remains smaller than all-time highs of 89 and 91 percent set in fall 2007 and spring 2006 respectively. Munster and fellow analysts believe it may the result of more sites offering music without copy protection, permitting iPod owners to buy more of their digital music outside of iTunes.

Nonetheless, the threat is understood to take root more in general market forces than in weaknesses inherent to Apple's own strategy.

Use of non-Apple online stores has dropped from 16 to 13 percent, and any gains by challengers in the MP3 player category primarily come at the expense of others. Microsoft's Zune has become the second most popular, with 3 percent owning the device and 13 percent planning to buy, but the share for virtually all others but Apple has dropped or else remained flat, uncovering a shift rather than a takeover.

"While Microsoft is gaining on Apple, the share growth is coming at the expense of players other than Apple, as Apple's share is growing too," Munster writes. "It is clear to us that Apple has captured the "cool factor" among high school students across America."

While getting food at a restaurant recently in SoCal, I spotted some chubby little 13-yo-looking teen girl sporting an iPhone.

Who let this happen? My iPhone makes me SPECIAL. It makes me a member of an elite group of people who are smarter than the rest of you, and therefore, recognize and embrace all the best grownup toys and technologies.

The "sense of childlike wonder" it restores in people's lives is just that, CHILD-LIKE. It isnt actually for children.

You have to take these things away from your children people, seriously. I mean right now.

Talk about speaking out of both sides of your mouth, Piper Jaffray goes from doubling sales set to double again ~then~ cooling iPod and iTunes use ~then~ iPod ownership at an all time record high ~then~ clouds of gloom ~and finally to~ non-Apple store use dropping from 16% to 13%.

They are definitely hedging all their bets by promoting opposing views in the same analysis, all taken from just one demographic of the market.

I mean get real. If iPod and iTunes sales went into the tank they could say "See, we told you so" or if Apple sells 200 million iPods in the 3rd QTR and doubled Wal-Mart in music sales they could say "See, we told you so"!

Especially when it's more expensive than any iPod plus a monthly fee for two years?

If everyone stopped buying iPods and got iPhones instead, wouldn't that be a *good* thing for apple?

Exactly. Recurring revenue is like the holy grail of the tech (and just about any other) industry. All Apple had to do was deliver a revolutionary handset and now they get paid a recurring stream. It doesn't get much better than that.

Sure, tons of the phones are pulled from the approved networks, but every iPhone they sell instead of an iPod seems like a good thing to me. And every sale on the approved networks is a great thing.

Talk about speaking out of both sides of your mouth, Piper Jaffray goes from doubling sales set to double again ~then~ cooling iPod and iTunes use ~then~ iPod ownership at an all time record high ~then~ clouds of gloom ~and finally to~ non-Apple store use dropping from 16% to 13%.

That's right, they should only report their findings if they all point in the same direction, preferably positive. If negative, keep them quiet. Can we all agree that would be best?

I swear I'm going to scream if I see one more 'analyst' say that iPhone sales are 'dulling|canabalizing|etc' iPod sales.
An iPhone IS AN IPOD!!!
Buy these guys a clue.

Sorry -you've been brainwashed- it's a frk'n phone!!!
If not, it would have been called an iPodPhone.WHen you go to Apple's website and hit iPod it does not appear- it is not listed under iPod but iPhone.
Obviously Apple has done a great job marketing that fallacy but the truth be told- a phone is a phone ; not an iPod.
In space no one can hear you scream.

Sorry -you've been brainwashed- it's a frk'n phone!!!
If not, it would have been called an iPodPhone.WHen you go to Apple's website and hit iPod it does not appear- it is not listed under iPod but iPhone.
Obviously Apple has done a great job marketing that fallacy but the truth be told- a phone is a phone ; not an iPod.
In space no one can hear you scream.

Point is that an iPhone purchase is in effect an iPod purchase, unless you know people who by both just for the fun of it.
So one must subtract every iPhone from any figures about 'iPod sales drops'.

BIG SWEATY DEAL! I think it is normal for teenagers to want an iPhone more than an iPod nowadays anyway. It has the iPod functionality, the internet, and phone capabilities. Therefore, Apple should not worry about the iPod anyway, especially if the Touch screen models will replace the current ones soon.

Point is that an iPhone purchase is in effect an iPod purchase, unless you know people who by both just for the fun of it.

Although this probably doesn't apply to high school teenagers (female, maybe it does for buff boys), someone might buy a Shuffle and/or a Nano for the gym, for running, etc. where they wouldn't take an iPhone.

And as for high school female teenagers, if anyone bought several colors of Shuffles as fashion accessories, they might continue doing so, even with an iPhone.

Point is that an iPhone purchase is in effect an iPod purchase, unless you know people who by both just for the fun of it.
So one must subtract every iPhone from any figures about 'iPod sales drops'.

Personally, I do have a scream that is transmitted by the ether.

No-an iPhone purchase is a phone purchase. It is a phone that has iPod like qualities.
No more than a LG, Motorola or any other phone that play MP3's is not an MP3 player but a phone that happens to play MP3's.
Many people I know do own an additional iPod such as the shuffle for the gym or a classic to hold their entire library.
Would you also consider a PS3 player a blu-ray machine as Sony has claimed or rather a gaming device? It does both but what is it?

BIG SWEATY DEAL! I think it is normal for teenagers to want an iPhone more than an iPod nowadays anyway. It has the iPod functionality, the internet, and phone capabilities. Therefore, Apple should not worry about the iPod anyway, especially if the Touch screen models will replace the current ones soon.

It ain't the end of the line for iPods yet!

Show me a teenager who would rather listen to music than talk on a phone, and I'll show you a true iPod owner. One is a personal communicator that also plays music, and the other is a personal music player that allows you to escape from the need to always be "in touch" with others to have a good time.

I'll resist commenting that much of what many teens listen to doesn't require a lot of storage capacity... just contain and play the same ten songs over and over and over and over...

I am part of that 13%!!! I actually own three Zunes: a 30GB, an 80GB and an 8GB model. I used to love the iPod, but once Apple changed produced the new Nano, Classic and Touch, I jumped ship.

Nano is too fat. The new OS is just a gimmick, but the extras cannot be turned off.

Classic has a nice design (the entire item should have been aluminum). The black looks great, but the silver is terrible looking. Same issues with the OS, but worse due to the HD.

Touch looks nice, but has TERRIBLE hiss. Also, the lack of a dedicated volume control is limiting. It should have the ability to act as a HD (Zune weakness too, but hackable) and definately should be able to sync wirelessly. People claim this ability of the Zune's is worthess, but I love being able to do a quick sync from anywhere in my home in the morning to add the new podcasts that were downloaded overnight.

I am part of that 13%!!! I actually own three Zunes: a 30GB, an 80GB and an 8GB model. I used to love the iPod, but once Apple changed produced the new Nano, Classic and Touch, I jumped ship.

Nano is too fat. The new OS is just a gimmick, but the extras cannot be turned off.

Classic has a nice design (the entire item should have been aluminum). The black looks great, but the silver is terrible looking. Same issues with the OS, but worse due to the HD.

Touch looks nice, but has TERRIBLE hiss. Also, the lack of a dedicated volume control is limiting. It should have the ability to act as a HD (Zune weakness too, but hackable) and definately should be able to sync wirelessly. People claim this ability of the Zune's is worthess, but I love being able to do a quick sync from anywhere in my home in the morning to add the new podcasts that were downloaded overnight.

I like the Zune UI. It's definitely more flashy than the iPod, but not pointlessly so like Vista did. The wireless feature was worthless when it only allowed you to squirt songs.

The example of syncing new podcasts to the device is the best I've read in favour of wireless syncing.

BTW, not having a volume control on the device is pretty daft. I have an iPhone, which has on, so I assumed the Touch had it too.

Dick Applebaum on whether the iPad is a personal computer: "BTW, I am posting this from my iPad pc while sitting on the throne... personal enough for you?"

Sorry -you've been brainwashed- it's a frk'n phone!!!
If not, it would have been called an iPodPhone.WHen you go to Apple's website and hit iPod it does not appear- it is not listed under iPod but iPhone.
Obviously Apple has done a great job marketing that fallacy but the truth be told- a phone is a phone ; not an iPod.
In space no one can hear you scream.

If you go to Apple web site store and click "iPhone" you will see that one of its' advertised feature is that it's a "widescreen iPod". And states that the "iPhone is an EQUALLY brilliant iPod". The iPhone is not just a phone with "iPod qualities" or a phone that can play MP3. Nearly every single after market item sold that works on an iPod will work on an iPhone. And the iPhone will function as an iPod on nearly every single after market device that was sold before it (the iPhone) came out. It's not brainwashing or a fallacy. The iPhone is also an iPod.

But as you stated. That doesn't mean that Apple (or anyone) should count an iPhone sale as an iPod sale. The iPhone is primarily a phone. And Apple wants people to buy it because it's a phone. Whether the iPhone eats into iPod sales depends on whether the buyer was originally planing to buy an iPod Touch and then decided on the iPhone for an extra $100. Or whether the buyer wanted an iPhone for the phone and the included iPod is just an added bonus. And in the end it doesn't matter because the bottom line is that both, the iPod and iPhone, real purpose to get people to buy Macs. Remember that "Halo" effect? The effect that most nay-sayers didn't believe exist.

My two years old son knows how to unlock the iPhone screen and turn on the iPod. Maybe in few months he can play his favorite song! This generation will make us (30 year and above) look like idiots. Well, at least we invented the internet

My two years old son knows how to unlock the iPhone screen and turn on the iPod. Maybe in few months he can play his favorite song! This generation will make us (30 year and above) look like idiots. Well, at least we invented the internet